Norway Economic Outlook

October 23, 2018

Quarter-on-quarter economic growth accelerated in June–August compared to the previous rolling quarter of March–May due to a strong expansion in exports. The mainland economy—which excludes hydrocarbon extraction activity and related transport—also expanded in the same period but decelerated slightly compared to March–May. Meanwhile, on 8 October the minority coalition government outlined its spending plans for 2019. The fiscal surplus is seen benefiting from growth in revenues outstripping that of expenditures. However, the successful passage of the budget through the Storting largely depends on support from the Christian Democrats, a small independent party which has backed the government in parliament over the past five years but will vote on whether to continue to do so on 2 November.

Norway Economic Growth

Output is expected to grow next year due to higher prices for oil and natural gas, and increased industry investment in hydrocarbon extraction. The mainland economy is expected to benefit from a tight labor market and high consumer and business confidence. Met the why particular Consensus Forecast panelists expect total GDP to expand 2.1% in 2019, which is unchanged from last month’s forecast, and 2.0% in 2020. Mainland GDP is expected to grow 2.1% in 2019, which is also unchanged from last month’s forecast, and 1.9% in 2020.

Norway Economic News

According to monthly GDP data released by Statistics Norway, the total economy contracted a seasonally-adjusted 0.5% in September over the previous month, down from the revised 0.2% fall in August (previously reported: -0.1% month-on-month).

According to Statistics Norway, industrial production fell a seasonally-adjusted 1.5% in September compared to the previous month, contrasting the revised 1.6% growth registered in August (previously reported: +1.8% month-on-month).
The fall in September was due to a near-broad-based decline across industrial sectors: The extraction and related services sector—the largest industrial sector in Norway—observed a 3.5% fall in output.

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